BILL ANALYSIS
AB 2275
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2275 (Hayashi)
As Amended August 17, 2010
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: | |(May 10, 2010) |SENATE: |33-0 |(August 18, |
| | | | | |2010) |
-----------------------------------------------------------------
(vote not relevant)
Original Committee Reference: B.P. & C.P.
SUMMARY : Prohibits contracts issued, amended, or renewed on or
after January 1, 2011, between a health care service plan, a
specialized health care service plan, or an insurer, and a dentist
from requiring a dentist to accept a payment amount set by the
plan or insurer for dental care services provided to an enrollee
or insured that are not covered under the contract. Prohibits a
provider from charging more for non-covered dental services than
his or her usual and customary rate for those services.
The Senate amendments delete the Assembly approved version of this
bill and instead:
1)Prohibit a full service or specialized health plan or insurer,
with respect to plan contracts and policies issued, amended, or
renewed on or after January 1, 2011, that cover dental services,
from requiring a dentist to accept an amount set by the plan or
insurer as payment for non-covered dental care services provided
to an enrollee or insured.
2)Prohibit providers from charging more for non-covered dental
services under a plan contract or insurance policy than their
usual and customary rate for those services.
3)Requires the evidence of coverage (EOC) and disclosure form, or
combined EOC and disclosure form, with respect to plan contracts
and policies issued, amended, or renewed on or after July 1,
2011, that cover dental services, to include the following
statements:
a) If a patient opts to receive non-covered dental services,
a participating dental provider may charge his or her usual
and customary rate for those services;
AB 2275
Page 2
b) Prior to providing a patient with dental services that are
not a covered benefit, the dentist should provide to the
patient a treatment plan that includes each anticipated
service to be provided and the estimated cost of each
service;
c) If the patient would like more information about dental
coverage options, the patient may call member services at
[insert appropriate telephone number], or his or her
insurance broker; and,
d) To fully understand his or her coverage, the patient may
wish to carefully review this EOC document.
4)Define "covered services" to mean dental care services for which
the plan or insurer is obligated to pay pursuant to an
enrollee's plan contract or insured's policy or for which the
plan or insurer would be obligated to pay pursuant to an
enrollee's plan contract or insured's policy but for the
application of contractual limitations, such as deductibles,
copayments, coinsurance, waiting periods, annual or lifetime
maximums, frequency limitations, or alternative benefit
payments.
EXISTING LAW :
1)Provides for the regulation of health plans and insurers by the
Department of Managed Health Care (DMHC) and the California
Department of Insurance (CDI), respectively.
2)Requires contracts between plans or insurers and providers to be
fair and reasonable.
3)Requires plans and insurers to reimburse a claim for covered
services within a specified period of time of receiving the
claim.
AS PASSED BY THE ASSEMBLY , this bill required annual state
property inventory reports by the Department of General Services
to be completed and updated by January 1 of each year.
FISCAL EFFECT : According to the Senate Appropriations Committee,
costs to CDI would be minor and absorbable and costs to DMHC would
continue to be about $60,000 - $70,000 in fiscal year 2010-2011,
but would likely be minor ongoing.
AB 2275
Page 3
COMMENTS : Covered dental services often include preventive and
diagnostic services, such as cleaning and routine dental exams;
basic dental care and procedures, such as fillings and
extractions; and major dental care, usually involving root canals
and crowns. Generally, orthodontia, cosmetic services, and
implants are excluded from benefits and are considered
"non-covered dental services." Cost-sharing for dental benefits is
structured similarly to general health benefits, with the amount
of deductibles and cost-sharing depending on the type of service.
Often basic dental care and procedures have lower deductibles and
cost-sharing amounts, while major services, such as crowns and
root canals have higher deductibles and out-of-pocket costs. Many
dental plans have an annual cap for covered services, at which
point the plan stops contributing to the cost of services until
the next enrollment year.
According to the author, this bill is intended to prohibit dental
benefit plans regulated by DMHC and CDI from setting fees charged
by dental practices for procedures that the dental plan does not
cover in its scope of benefits. The author asserts that the
policy of dental benefit plans capping fees for procedures they do
not cover is an intrusion into the marketplace, and results in the
plans dictating fees for services they have no financial stake in,
and for which the plan bears no risk. Furthermore, the author and
sponsor state that dentists are not given the opportunity to
refuse provisions requiring dentists to adhere to discounted fees
for procedures that a dental plan doesn't cover, but must accept
them along with the entire contract if they want to participate in
the plan's provider network. The author and sponsor maintain that
the capping of fees for non-covered services is used as a
marketing tool by plans and insurers with prospective subscribing
groups, and has given an advantage to the larger dental benefit
companies which have a larger market share and more negotiating
power. The sponsor states that this bill seeks to level the
playing field among all dental plans.
This bill was substantially amended in the Senate and the
Assembly-approved version of this bill was deleted. This bill, as
amended in the Senate, is inconsistent with Assembly actions.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916) 319-2097
FN: 0006255